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Illumina Posts 47 Percent Jump in Q1 Revenues

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Illumina reported after the close of the market Tuesday that its first-quarter revenues increased 47 percent, paced by strong growth in its sequencing business and demand for its HiSeq 2000 systems.

The San Diego-based firm reported total revenues of $282.5 million for the three-month period ended April 3, compared to revenues of $192.1 million for the first quarter of 2010. Its product revenues were $266.7 million versus $173.7 million for the prior year first quarter, and its services and other revenues were $15.8 million versus $18.5 million.

The revenues topped analysts' consensus estimate of $261.4 million.

Illumina's product revenues were $267 million, up 54 percent year over year, CFO Christian Henry said during a conference call following the release of the results. Its consumables sales were $148 million compared to $114 million for Q1 2010, and are providing a return slightly above the firm's expectations of between $150,000 and $200,000 per instrument, he noted.

"During the quarter, we worked through the majority of the remaining promotion-related HiSeqs from our backlog and recognized the corresponding benefit to gross margin," Illumina CEO Jay Flatley said during the call. "The rapidly growing number of HiSeq systems in the field led to a higher mix of consumable revenue in Q1."

He noted that the firm's microarray revenues were down slightly from Q4, though the first quarter is usually seasonally soft. "However, Q1 microarray revenue grew year over year led by strong results in array instrumentation due to shipments of the HiScan and HiScan SQ systems."

"Demand for our Eco real-time PCR instrument is continuing to build nicely," said Flatley. "We experienced some initial challenges in ramping manufacturing that we believe are now behind us. We're significantly scaling Eco production and expect to deliver the product with standard lead times by the end of this quarter."

Flatley also said that the firm is on schedule to make initial shipments of its MiSeq, a lower cost sequencing platform aimed at a broader customer base, in the third quarter.

Illumina posted net income of $24.1 million, or $.16 per share, compared to $21.2 million, or $.16 per share, for Q1 2010. On a non-GAAP basis, the firm had net income of $50.3 million, or $.35 per share, compared to $26.6 million, or $.21 per share, for Q1 2010. Analysts had expected net income of $.31 per share.

The company spent $50.2 million on R&D, up 15 percent from $43.7 million. Its SG&A spending increased 31 percent to $65.9 million from $50.3 million. Illumina also recorded $2.5 million in headquarter relocation expense in the quarter.

The firm disclosed earlier this year that it will move to a new location in San Diego.

"We're in the planning phase of the move right now," Henry said. "By the end of the year, we should have most of the headquarters staff completely moved over to the new facility."

He noted that the firm's manufacturing operations won't move to the new facilities until the first quarter of 2012.

Illumina finished the quarter with $410.3 million in cash and cash equivalents.

In early Wednesday trade on the Nasdaq, shares of Illumina were down 1 percent at $69.28.